MGM China's Q4 Property EBITDA Exceeds Projections, CLSA Keeps Outperform Rating

Stock News
02/06

CLSA reported that MGM CHINA (02282) achieved a property EBITDA of HK$2.753 billion in the fourth quarter of 2025, a 29% increase year-on-year, surpassing both the firm's and market expectations by 9%. This outperformance was primarily driven by a higher-than-average win rate in the VIP segment at MGM Cotai. The company's total gaming revenue market share also expanded by 0.6 percentage points year-on-year to 16.3%. Even after excluding the HK$233 million impact from the above-average VIP win rate, the reported property EBITDA margin still improved by 0.2 percentage points year-on-year to 26.8%. This margin remains consistently near the upper end of the company's target range in the high 20% area, indicating effective control over operating expenses and rebates. MGM CHINA currently trades at a forecasted enterprise value multiple of 7.2 times for this year. CLSA maintains its "Outperform" rating with a target price of HK$20.9. The report noted that MGM CHINA's net revenue for the quarter grew 21% year-on-year to HK$9.617 billion, which was 2% higher than CLSA's forecast. Based on additional operational data released by MGM Resorts, CLSA estimates MGM CHINA's total gaming revenue market share for Q4 2025 was 16.3%, implying a year-on-year increase of 0.6 percentage points. Furthermore, CLSA estimates the above-average win rate in MGM Cotai's VIP business contributed HK$233 million to property EBITDA. Excluding this effect, normalized EBITDA would be HK$2.520 billion, and the performance after this adjustment was in line with expectations.

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